Pluralistic: 21 Nov 2022 Universities secretly sold their students to online casinos

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A gaudy casino floor. In the foreground is a figure in college graduation robes giving a double thumbs-up. His head is a grinning skull with a mortarboard.

Universities secretly sold their students to online casinos (permalink)

End-stage capitalism's defining characteristic is making money rather than making things. Think of how Jack Welch destroyed GE by transforming it from a manufacturing company to a financial engineering shop:

Hospitals are invoice-generating factories with a sideline in medicine. The electronic health record only incidentally records your health. Its primary purpose is to record your billing-codes:

And universities? Ugh. Most universities now have more administrators than faculty:

Much of that "administration" comes down to begging alums for money to funnel into vast endowments, but heaven forfend those endowments would be used to cover payroll and other essentials, even in a pandemic emergency:

Nor are endowment funds available to pay the education workers who actually teach students, but can't afford the rent, food, or family:

The point of the endowment is to increase the size of the endowment – not to improve educational outcomes or research. That's why Harvard is "A hedge fund that has a university":

This is the overwhelming logic of capital: capital exists to increase capital, and the underlying mechanism for that increase is irrelevant. This was the reasoning behind the surreal bid to sell the .ORG nonprofit registry to a secretive hedge-fund.

The point of the .ORG registry is to host domain records for nonprofits; incidentally, this throws off some extra money that is turned into grants for public interest projects. The board decided to sell off .ORG so it could make more of these grants, despite the fact that this would compromise the mission of hosting .ORG domain records:

Likewise, this was the reasoning of the Mountain Equipment Co-Op board when they decided to sell off the member-owned co-op ("the most trusted brand in Canada") to a US private equity fund without consulting the members:

The expand-capital-at-all-costs mindset is a virulent species of brain worms. It's the basis for surreal movements like effective altruism, which encourages people who want to do good for the world to sell out to the most toxic industries on Earth, amass gigantic fortunes, and then, upon their death, donate them to causes that in some way remediate the harms they themselves wreaked:

In his new book Survival of the Richest, Douglas Rushkoff calls this "The Mindset" – "I need to make vast amounts of money, no matter what the consequences, or I will not be able to afford to insulate myself from the consequences of how I made all that money":

Once you let people with The Mindset anywhere near your institution, they will take it over and turn it into a paperclip-maximizing killing machine, one that abandons and then betrays its mission to increase its profits, eventually killing its host. Anything that can't go on forever will eventually stop:

That's what's happened to higher ed. It's not just the payroll full of starving adjuncts, facilities workers, etc. It's not just the way that universities join forces with textbook monopolists to gouge their students:

Beyond academics having to rely on food-stamps, students going into lifetime debt to enrich predatory textbook monopolies, and the other horrors of financialized higher ed, there's the special evil of college sports.

Like all finance-bro motivated reasoning, college sports are sold as a way to do well by doing good: "Look! We're giving poor people a chance at a great education based on their physical prowess, and we're racking up tons of money for the university!"

But – like all finance schemes – college sports is a self-licking ice-cream cone that destroys the lives of the people who generate value for it, even as it devours its host institution from within.

Did you know that until very recently, college athletes weren't allowed to make a penny from their labor?

Did you know that those same athletes experience lifelong brain injuries?

Did you know that college sports are a cesspit of long-term, officially tolerated sexual abuse?

Did you know that the highest paid public employee in many states is a football coach at a state college?

Did you know that college coaches conspired with the rich parents to steal sport-related admission slots from poor kids and give them to mediocre winners of the orifice-lottery?

In many universities – whether public or private – the sports program effectively runs the show. Take the University of New Hampshire: back in 2016, a university librarian named Robert Morin left his life's savings to the school after 50 years of service. Morin lived frugally for that half century and amassed a personal fortune of $4m.

He believed so deeply in the university's mission that he turned it all over to the school without any restrictions. Talk about earning to give! The university blew Morin's gift on a new jumbotron for their sports stadium:

The people who see universities as inconvenient adjuncts to exploitative sports teams know that there are still rivals within higher ed who think the point of the school is to educate students.

That's why the universities that arranged to allow sports gambling websites to target the young people in their care did so in secret.

Writing for the New York Times, Anna Betts, Andrew Little, Elizabeth Sander, Alexandra Tremayne-Pengelly and Walt Bogdanich reveal the extraordinary corruption and depravity of college administrators who colluded with sports book companies to bring gambling to campus.

Implicated in the scandal are such top schools as Michigan State, U Colorado Bolder, Louisiana State, Syracuse and Texas Christian Univeristy (mission: "to educate individuals to think and act as ethical leaders and responsible citizens").

On the casino side, the major player is Caesar's, which is only fitting – Caesar's was driven to bankruptcy by private equity who managed to financialize a casino into ruin:

Caesar's offered universities millions of dollars for the right to directly market sports betting to students. The MSU deal, brokered by university officials Paul Schager and Alan Haller, was worth $8.4m. That is to say, Caesar's was asking the university to help it drain at least $8.4m from students' bank accounts in order to turn a profit.

Louisiana State U did a similar deal with Caesar's, and then embarked on a direct marketing campaign to sell sports gambling to students who were too young to legally place a bet.

LSU says this was a mistake. Cody Worsham, a university official who holds two offices – associate athletic director and chief brand officer (!!) – said that Caesar's and LSU "share a commitment to responsible, age-appropriate marketing."

Meanwhile, U Colorado Boulder struck a deal where it earned a $30 bounty every time a student went from non-gambler to gambler – in other words, Boulder didn't make money by advertising gambling to students – it made money only if its students started gambling.

These student gambling programs are designed to keep children betting even if they lose money, with teaser offers that refund some losses if students keep placing bets.

This is obviously unsavory stuff. That's why the architects of these programs went to enormous lengths to keep it secret. The state schools involved funneled their deals through private marketing agencies that were shielded from FOIA requests, specifically to prevent the public from learning how public universities were conducting their affairs.

As MSU executive associate athletic director Paul Schager put it: "With the multimedia rights holder, public institutions like Michigan State no longer have to disclose all those sponsorship deals. This helps with the sponsors being able to spend what they feel is appropriate without having the public or employees or stockholders question that investment."

The deals themselves are far-reaching. As part of MSU's Caesar's deal, tailgate parties before big games would be "Caesarized," with the casino providing ad-copy for the live announcers to read to attendees. As a figleaf, $25,000 of the millions that MSU received from Caesar's was earmarked for gambling addiction education.

The deals weren't just kept secret from the public – they were also hidden from top university oversight. At UC Bolder, the Board of Regents was informed of the deal mere hours before it was announced to the public.

These deals have only been running for a couple months and it's too soon to chart the long-term harms they'll create in the student body. But, the Times notes, there is an one harm that surfaced almost immediately: student athletes are now subject to vicious abuse by their fellow students, who lose money they can't afford when their peers lose a game.

Hey look at this (permalink)

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Colophon (permalink)

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